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Waymo Expands Chrysler Self-Driving Fleet 100-Fold to 62,000

(Bloomberg) -- Alphabet Inc.’s Waymo is expanding its partnership with Fiat Chrysler Automobiles NV by adding tens of thousands of minivans to its fleet of self-driving cars and the two said autonomous vehicles could eventually be sold to the public.

The addition of 62,000 Chrysler Pacifica plug-in hybrid minivans builds on a commitment announced in January to buy an unspecified number of the vehicles, which are kitted out with sensors that can see hundreds of yards in any direction. Waymo already had about 600 Pacificas in use in several cities, where they’re being tested with non-paying passengers.

The announcement moves Waymo another step out in front in the race to launch a fleet of autonomous automobiles for a public ride-hailing service, planned to debut in Phoenix later this year. Earlier on Thursday, a rival added financial heft: Japan’s SoftBank Vision Fund agreed to invest $2.25 billion in General Motors Co.’s autonomous-vehicle unit.

Shares in all three companies rose after SoftBank’s backing highlighted the potential value of the nascent field. GM shares jumped as much as 12 percent, Fiat Chrysler climbed as high as 4.7 percent and Alphabet rose as much as 3 percent.

Fiat Chrysler and Waymo are also beginning discussions about using Waymo’s self-driving technology in Fiat Chrysler-manufactured vehicles that would be available to retail customers, according to a statement.

The companies didn’t provide a list price of the retail model. Waymo has said its package of sensors is far cheaper to produce than others, but any retail versions of fully driverless cars would still be expensive and would likely be sold on par with luxury vehicles or heavily subsidized by the companies.

Fiat Chrysler’s premium Alfa Romeo and luxury Maserati brand, which makes the Ghibli and Quattroporte luxury sedans, would be a likely home for Waymo’s self-driving software, said Sam Abuelsamid, an analyst with Navigant Research. The two brands had combined worldwide sales of about 130,000 units last year, with Maserati prices in the $70,000 to $100,000 range, according to Abuelsamid.

“There’s definitely a market there,” Abuelsamid said. “All you have to do is look at Tesla and how many vehicles they’ve sold with Autopilot.”

Waymo has been working on its driverless technology since 2009 and has logged 6 million miles on public roads. It has run tests covering more than 20,000 individual driving scenarios. Waymo is currently the only company with a fleet of fully self-driving cars on public roads without human safety drivers at the wheel.

The agreement is a big step for Fiat Chrysler, which has lacked the resources to pursue these kinds of technologies and services itself. The automaker’s approach has been to partner with Waymo and others. The strategy aims to conserve capital while seeing how the industry develops.

John Krafcik, Waymo’s chief executive officer, often mentions the four business fronts the Alphabet arm is pursuing: ride-hailing, logistics, city partnerships and personal car ownership. To date, Waymo has on only showed the ingredients for a ride-hailing service. Self-driving retail vehicles from Fiat Chrysler would be a first for the industry, although Tesla Inc. has sold cars with its Autopilot software, which offers limited levels of automation.

Despite its technical lead, Waymo has struggled to form strong auto-industry partnerships that would give it a clear path to getting enough vehicles on the road for a profitable commercial ride-hailing service. Thursday’s deal with Fiat Chrysler, and another recent partnership with Jaguar Land Rover, may help.